This Study prepared by CII and Frost and Sullivan, is divided into two sets of case studies in electronics manufacturing, first set covering best practices of select countries, while the second set covers success stories of companies in India.
Global Success Stories:
Electronics is a technology driven industry and is characterized by shortening of product life cycles,
Shrinking form factors, increased functionalities, reducing cost per function and multifunctionality due to the convergence of technologies.
The share of India in global production is estimated to be 2.5%. While over the years' production bases have shifted to the Asia Pacific due to various factors like the availability of labour and wage rates and deepening of the supply chains India has not been able to advantage of the shifts.
Also, several countries world over like Korea, Taiwan, Malaysia, Thailand and China have leveraged electronics manufacturing for employment, higher per capita income and prosperity. Even late entrants such as Vietnam have surpassed India in production and export.
In India, while electronics manufacturing has been identified as a thrust area the growth of electronics manufacturing in India has so far not been consistent with the potential. More than half of the demand continues to be met through import.
The study captures the factors driving the select five countries to success in Electronics Manufacturing. The countries in covered are China, Taiwan, South Korea, Thailand, and Vietnam.
Indian Success Stories:
The Policy, Schemes and the various initiatives when announced were considered path breaking by the industry. While a number of proposals for investment have been made to the Ministry of Electronics & IT, the quantum and products covered is limited compared to the targets set out in the NPE 2012. There have been several challenges in the implementation of the policy.
In the present scenario, the turnover of USD 400 Billion is unlikely to be achieved and needs a re-examination.
ICTE is the first industry to face elimination of duty on account of India signing ITA-1 agreement under which the customs duty on 217 tariff lines were brought to zero over a seven-year time frame of 1998-2005. Due to several issues, the industry is finding it difficult to compete with imports at zero duty. Several units have closed down.
However, there has been a number of cases where companies in India have successfully met the challenge and shown growth also. The study has documented success stories of 11 companies from India in the Electronics manufacturing space bringing out the approach taken by these companies in meeting the challenges and successfully growing over the years.